Form 1099 MISC Explained
Please see below for additional instructions and information regarding this program.
Form 1099-MISC is one of the most common Information Reporting Forms that businesses, estates, trusts and non-profits are required to file at the end of the calendar year. It is also the Form 1099 that most commonly has errors identified by the IRS. Even worse, it has been completely revamped and both the
data validation and filing process will be completely new this year. So what can you do NOW to prepare a Form 1099-MISC early next year and avoid notices of errors from the IRS? By developing best practices and exercising due diligence collecting data to be included on the Forms 1099-MISC.
- The most common mistakes are not the amounts in the boxes but the mis-match of the payee’s name and the payee’s Identification Number whether it be a Social Security Number, Employer’s Identification Number, or Taxpayer’s Identification Number.
- The second most common mistake is failure to prepare Form 1099-MISC for payment of services of $600 or more.
- Lastly, by confusing what gets reported on the
Form 1099-MISC and what is to be reported on the brand new 1099-NEC
At the completion of this course you will have the tools necessary to evaluate the W9 and prepare a Form 1099-MISC with all the blocks properly completed.
- Review W-9 for Accuracy & Completeness
- Match W-9 SSN, EIN, TIN to IRS records
- Entities Who Should Send 1099 MISC
- Entities Who Should Receive a 1099-MISC
- Block by Block Instructions of 1099-MISC
Important Issues Covered:
- What name and EIN/SSN goes on the 1099-MISC?
- How do I know what amount goes in which block?
- Example: When to report rental related payments on the Form 1099-MISC versus those that get reported on the Form 1099-NEC versus those get reported on the Form 1099-S
- Example: When gross proceeds paid to an attorney and settlement payments paid to a claimant are reported on the 1099-MISC in boxes 3 or 10 versus those reported on other Forms 1099 or not reported at all
- Example: When to report payments to medical service providers in box 6 of the 1099-MISC versus box 1 of the Form 1099-NEC
- You will learn the most common mistakes
- You will learn how to review for accuracy and completeness
- You will learn entities who should receive a 1099 MISC
- What’s New 00:01:12
- What’s New - 2020 Form 1099 NEC 00:06:29
- What’s New -The 2020 Form 1099-NEC Reportable Payments 00:10:13
- What’s New -The 2020 Form 1099-NEC - Box 1 Examples 00:12:05
- What’s New -The 2020 Form 1099-NEC - Examples of Non-Reportable Payments 00:19:10
- What’s New -The 2020 Form 1099-NEC -Other Implications 00:23:12
- What’s New -The 2020 Form 1099-MISC 00:32:41
- What’s New -The 2020 Form 1099-MISC - Boxes 1,2,3, and 6 00:41:06
- What’s New -The 2020 Form 1099-MISC - Non-Reportable Payments 00:57:57
- What’s New -The 2020 Form 1099-MISC - Related Implications 01:00:51
- What’s New -The 2020 Form 1099-MISC - Related Implications (cont’d) 01:06:09
- What’s New -The 2020 Form 1099-NEC and 1099-MISC - Your Action Steps 01:11:15
- 1099-MISC Filing Starts Starts With The W-9 01:13:37
- Watch Those TIN’s! 01:15:50
- Watch Those TIN’s! (cont’d) 01:16:18
- Payee Refuses to Provide TIN: What Do You Do? 01:18:06
- You Must Perform Your Form W-9 Solicitations 01:18:37
- Problem Payees and 1099-MISC Filing 01:19:05
- Problem Payees and 1099-MISC Filing - The LLC 01:19:36
- Problem Payees and 1099-MISC Filing- The LLC and Disregarded Entity 01:21:12
- TIN Matching and 1099-MISC Filing 01:22:34
- Backup Withholding Policies and 1099-MISC Filing 01:23:49
- Another Year-End Task: B-Notice Response Best Practice 01:24:28
- Protect Yourself - 01:27:27
- Attendee Questions- 01:28:49
- Presentation Closing 01:45:08
- Audit 00:02:51
- Backup Withholding 00:22:54, 01:01:36, 01:18:37
- B-Notice 001:05:16
- CP-2100 01:24:35
- CP-2100-A 01:24:35
- DBA -Doing Business As 01:14:02
- Disregarded Entity 01:15:10
- EIN 01:16:19
- Form 1042-S 00:01:12
- Form 1099-INT 00:21:06, 00:54:54
- Form 1099 MISC 00:04:32, 00:32:59
- Form 1099-NEC 00:04:32, 00:06:32, 00:16:26, 01:06:47
- Form 1099-R 00:21:14, 00:46:26
- Form 945 01:24:21
- Form 990 01:22:03
- Form W-2 00:21:26
- Form W-9 01:13:39
- Fringe Benefits 00:16:37
- Golden Parachute Payments 00:38:41
- IRC Section 3406(a) 00:09:05:05
- IRC Section 6041(a) 00:09:05
- IRC Section 6109(a)(2) 00:009:04
- Limited liability company (LLC) 01:14:11, 01:19:39
- Safe Harbor 00:04:20
- Sole Proprietor 01:14:09
- Tax Cuts and Jobs Act 00:19:38
- Tax Exempt Organization Search Tool 01:21:54
- Tax Gap 00:01:12
- TIN 01:13:53
- TIN Match Program 01:22:39
Form 1099-INT: Form 1099-INT is the IRS tax form used to report interest income. The form is issued by all payers of interest income to investors at year end and includes a breakdown of all types of interest income and related expenses. Payers must issue Form 1099-INTs for any party to whom they paid at least $10 of interest during the year.
Form 1099 MISC: The Form 1099-MISC is an Internal Revenue Service (IRS) tax return document used to report miscellaneous payments made to nonemployee individuals, such as independent contractors, during the calendar year. (www.shrm.org)
Form 1099-NEC: In the context of 1099 tax filing, NEC stands for “Nonemployee Compensation” (the first letters of the three words None, Employee and Compensation). Most tax payers recognize NEC as box 7 on Form 1099-MISC. NEC is used to report income paid to independent-contractors / the-self-employed (referred to as 1099 employees for simplification purposes). So, while employers report income that gets paid to employees on Box 1 (Wages, tips, other compensation) of the W2 form, payers report income that gets paid to none-employees on Box 7 (NEC) of the 1099-MISC form. As an individual, if you received form 1099-MISC instead of Form W-2 then the payer did not consider you an employee and did not withhold income tax or social security and Medicare tax.
Form 1099-R: Form 1099-R is a tax form from the Internal Revenue Service (IRS) for reporting distributions from annuities, profit-sharing plans, retirement plans, IRAs, insurance contracts, or pensions.
Form 945: IRS Form 945 is titled Annual Return of Withheld Federal Income Tax. Form 945 is used to report withheld federal income tax from nonpayroll payments, including distributions from qualified retirement plans.
Form 990 : Form 990 (officially, the "Return of Organization Exempt From Income Tax") is a United States Internal Revenue Service form that provides the public with financial information about a nonprofit organization. It is often the only source of such information.
Form W-2: Form W-2 is an Internal Revenue Service tax form used in the United States to report wages paid to employees and the taxes withheld from them. Employers must complete a Form W-2 for each employee to whom they pay a salary, wage, or other compensation as part of the employment relationship. - Wikipedia (https://en.wikipedia.org/)
Form W-9: Form W-9 (officially, the "Request for Taxpayer Identification Number and Certification") is used in the United States income tax system by a third party who must file an information return with the Internal Revenue Service (IRS). It requests the name, address, and taxpayer identification information of a taxpayer (in the form of a Social Security Number or Employer Identification Number). - Wikipedia (https://en.m.wikipedia.org/)
Fringe Benefits: An extra benefit supplementing an employee's salary, for example, a company car, subsidized meals, health insurance, etc.
Golden Parachute Payments: Golden parachute payments are payments of compensation made to individuals whose companies experience a change in control
IRC Section 3406(a): Requires that, under certain circumstances, including the payee's failure to provide a TIN, the payer must perform backup withholding.
IRC Section 6041(a): Provides that persons engaged in trade or business must report certain payments on an information return.
IRC Section 6109(a)(2): Requires that a payee provide a TIN to the payer when the payment will be reportable on an information return.
Limited liability company (LLC): An LLC is a corporate structure where members cannot be held accountable for the company’s debts or liabilities. This can shield business owners from losing their entire life savings if, for example, someone were to sue the company. Can be a single member (much like a sole proprietor) or a multi-member. It shares certain traits of both corporations as well as partnerships or sole proprietorships. It is not a corporation.
Safe Harbor: A safe harbor is a provision of a statute or a regulation that specifies that certain conduct will be deemed not to violate a given rule. It is usually found in connection with a vaguer, overall standard. Under the safe harbor, a “rental real estate enterprise” is treated as a trade or business for purposes of Sec. 199A if at least 250 hours of services are performed each tax year with respect to the enterprise. ... The safe harbor requires that separate books and records be maintained for the rental real estate enterprise.
Sole Proprietor: A business that legally has no separate existence from its owner. The sole proprietorship is the simplest business form under which one can operate a business. The sole proprietorship is not a legal entity. It simply refers to a person who owns the business and is personally responsible for its debts.
Tax Cuts and Jobs Act: The Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018, Pub.L. 115–97, is a congressional revenue act of the United States originally introduced in Congress as the Tax Cuts and Jobs Act, that amended the Internal Revenue Code of 1986.
Tax Exempt Organization Search Tool: Tax Exempt Organization Search helps users find information about a tax-exempt organization’s federal tax status and filings.
TIN Match Program: TIN Matching is part of a suite of Internet-based pre-filing e-services that allows “authorized payers” the opportunity to match 1099 payee information against IRS records prior to filing information returns.
Steven Mercatante is the principal and founder of TIR Consulting, LLC. He is a nationally recognized leader in tax reporting education and consulting on specialized compliance issues. He has conducted on-site consultation for corporate clients from across the world and led countless seminars and webinars for Convey Compliance Systems, IAPP, Balance Consulting, The Accounts Payable Network, Accounts Payable Now and Tomorrow, Progressive Business Conferences, The Center For Competitive Management,... View Full Profile
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